Fiscal stringency and fiscal sustainability: Panel evidence from the American state and local governments

Mahdavi, Saeid; Westerlund, Joakim

doi:10.1016/j.jpolmod.2011.08.015

Cited by 61 publications

(58 citation statements)

References 30 publications

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“…We explicitly take into account fiscal transfers when assessing fiscal sustainability. Our study is closely related to Mahdavi and Westerlund (), who employ panel unit root and cointegration tests to investigate fiscal policies of U.S. state and local governments. Mahdavi and Westerlund explore to what extent balanced budget rules facilitate fiscal sustainability and arrive at the result that without federal grants, state and local governments as a group are unable to fund their current operation expenditures using their own‐source revenues (Mahdavi and Westerlund , p. 963).…”

Section: Prior Studies and Research Frameworkmentioning

confidence: 97%

Fiscal Transfers and Fiscal Sustainability

Potrafke¹,

Reischmann²

2015

J of Money Credit Banking

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may

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Section: Prior Studies and Research Frameworkmentioning

confidence: 97%

Fiscal Transfers and Fiscal Sustainability

Potrafke¹,

Reischmann²

2015

J of Money Credit Banking

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“…The IBC‐based sustainability tests at the subnational government level, however, are quite scant. In perhaps the only study of this kind, , using a testing variation suggested by , examined the cointegration between with‐interest expenditures and revenues and alternative fiscal balance definitions in a panel of 47 combined state and local government units (1960–2006). They found evidence of “strong sustainability” (based on a cointegration coefficient that was not significantly different from unity) in relation to more broadly defined balances (i.e., those including federal grants and/or special funds) and “weak sustainability” (based on a cointegration coefficient that was significantly less than one) in relation to more narrowly defined balances.…”

Section: Testing For Fiscal Sustainability: a Review Of Theory Andmentioning

confidence: 99%

Bohn's Test of Fiscal Sustainability of the American State Governments

Mahdavi

2014

Southern Economic Journal

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The dramatic fall in state revenues during the Great Recession and the resultant large budget deficits accentuated concerns about state fiscal sustainability. I employ a model‐based approach proposed by to test for sustainability. In this approach, a positive and significant reaction of the ratio of primary surplus ratio (s) to lagged debt constitutes a sufficient condition for sustainability. Based on a panel of 48 contiguous states (1961–2008) and several model specifications, I find robust evidence in favor of sustainability. Further analysis suggests that the adjustment of the components of s to debt is asymmetric with the revenue side bearing a heavier burden than the spending side. The response of s is also found to be asymmetric with respect to the level of debt. Finally, the magnitude of the response is larger in states with a higher degree of fiscal stringency in general and “own‐revenue” and “no‐deficit‐carryover” provisions in particular.

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“…Comparing states in the US. Mahdavi and Westerlund (2011) and Smith and Hou (2013) conclude that the adoption of carry-over, together with controls over supplementary appropriations is particularly effective in balancing the budget. The reason for this is that governments, when proposing the budget to the appreciation of the legislative branch, as they are preventing from compensating deficit of a fiscal year in the following years, results in reducing spending.…”

Section: Literature On Budget Carry-overmentioning

confidence: 99%

Restos a pagar e a perda da credibilidade orçamentária

Aquino

Azevedo

2017

Rev. Adm. Pública

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This article discusses the use of unpaid commitments and its impacts on the credibility and transparency of public finances. Based on a typification of the four types of existing carry-over in current Brazilian regulation, the article shows evidence of the emergence of a "parallel budget" in the three levels of government with regulation and external control issues. The development of the balances and enrollment of the unpaid commitments was proxied by the sum of these accounts in the Federal Government balance sheet, as well as in 26 States and the Federal District, and for 4,100 cities. Additionally, the interpretation given by the Courts of Auditors for unpaid commitments usage by governments without financial ballast was observed as well as the level of transparency given by those governments with the larger amounts of unpaid commitments. The results indicate that, besides the growing debt, the weak regulation of unverified unpaid commitments is seriously reducing the credibility and transparency of the budget at all levels of government. Keywords: unpaid commitments; public budget; carry-over; indebtedness; transparency. Restos a pagar e a perda da credibilidade orçamentáriaO artigo discute o uso da inscrição em restos a pagar e seus impactos na credibilidade e na transparência do orçamento público. A partir de uma tipificação dos quatro tipos de carry-over existentes na regulação brasileira, articularam-se evidências do surgimento de um "orçamento paralelo" nos três níveis de governo com aspectos de regulamentação e controle externo. A evolução dos saldos e da inscrição de restos a pagar foi captada pelos saldos dessas contas no governo federal, nos governos de 26 estados e Distrito Federal, e em cerca de 4.100 municípios. Adicionalmente, observaram-se a interpretação dada pelos Tribunais de Contas para a inscrição em restos a pagar sem lastro financeiro, assim como o nível de transparência dada pelos governos com maiores saldos de restos a pagar. Os resultados indicam que, além do crescente endividamento, a fraca regulação sobretudo dos restos a pagar não processados está reduzindo seriamente a credibilidade e a transparência do orçamento em todos níveis de governo. Palavras-chave: restos a pagar; orçamento público; carry-over; endividamento, transparência. Compromisos pendientes y la credibilidad del presupuesto públicoEl artículo debate el uso de la inscripción en restante a pagar y sus impactos en la credibilidad y en la transparencia del presupuesto público. A partir de una tipificación de los cuatro tipos de carry-over existentes en la reglamentación brasileña, se articularon evidencias del surgimiento de un "presupuesto paralelo" en los tres niveles del gobierno con aspectos de reglamentación y control externo. La evolución de los saldos y de la inscripción en restante a pagar fue captada de los saldos de tales cuentas en el gobierno federal, en los gobiernos de 26 estados y el Distrito Federal, y cerca de 4.100 municipios. Además, se observó la interpretación dada por los Tribunales de Cuentas para...

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Fiscal stringency and fiscal sustainability: Panel evidence from the American state and local governments

Cited by 61 publications

References 30 publications

Fiscal Transfers and Fiscal Sustainability

Fiscal Transfers and Fiscal Sustainability

Bohn's Test of Fiscal Sustainability of the American State Governments

Restos a pagar e a perda da credibilidade orçamentária

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